Prime Minister Prayut Chan-o-cha has asked state agencies to revise their annual spending plans in line with falling oil prices.
"State agencies should reconsider which part of their spending has benefited from the sharp drop in crude oil prices and earmark more funds for investment," he told a meeting of state agencies hosted yesterday by the Budget Bureau.
Prayut: Urging faster agency improvements
Gen Prayut also urged state agencies to speed up restructuring and improvements in their regulations to facilitate cooperation and partnership with the private sector, be it export stimulus, energy or agricultural reform, in order to increase the incomes of low earners.
Budget Bureau director Somsak Chotrattanasiri said the sharp fall in crude oil to about US$50 a barrel was expected to cut construction costs of megaprojects by 5%.
Of state enterprises investment costs of 400 billion baht in fiscal 2015, some 150 billion worth of construction contracts have already been signed off by the agencies, leaving 250 billion pending consideration.
Mr Somsak said if oil prices remained below $50 a barrel in fiscal 2016 starting this Oct 1, it would help to cut state agencies' expenditure on megaproject transport and construction costs.
The cabinet on Tuesday agreed to set aside 2.72 trillion baht for expenditure and run a budget deficit of 390 billion in fiscal 2016.
The budget framework assumes projected economic growth of 3.7% to 4.7% in fiscal 2016, with inflation of 1.1% to 2.1%.
The expenditure budget was increased by 5.6% or 145 billion baht from fiscal 2015, while the deficit for fiscal 2016 was widened by 56% or 140 billion baht.
The government projects net revenue will rise slightly by 0.2% or 5 billion baht in fiscal 2016 to 2.33 trillion.
Of the total budget, 2.1 trillion baht is earmarked for the regular budget, up by 3.6% from fiscal 2015, and the investment budget by 21% to 544 billion.
Some 13.5 billion baht will go as compensation to the Treasury, down by 67.7%.
Mr Somsak said fiscal 2016 would be the first time in more than five years that the investment budget accounted for 20% of the fiscal budget.
In fiscal 2015, the investment budget makes up 17%.
Mr Somsak said state agencies had so far proposed projects worth a combined 596 billion baht for fiscal 2016.
The Transport Ministry has proposed 165 billion baht worth of projects, along with the Interior Ministry (115 billion), the Education Ministry (72.2 billion), the Agriculture Ministry (65.7 billion), the Public Health Ministry (23.2 billion), the Defence Ministry (13.7 billion), the Natural Resources and Environment Ministry (22.4 billion), the Tourism and Sports Ministry (3.84 billion) and the Information and Communication Technology Ministry (1.93 billion).